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Sobre La Roca: Cooking with the sun

June 12, 2009 | Comments Off | Enterprises

Our first reporting on the Bolivian soil takes place in Cochabamba. We came to Cochabamba earlier than expected to meet Ruth Saaverda, our entrepreneur, before she was leaving on holiday for one month. This interview has been incredible: in addition to our interview with Ruth, we had the chance to attend a demonstration of the product in the Bolivian countryside. After a three hours-long journey through muddy roads, we got to a community of miners where we discovered the numerous advantages of the solar cooker.

Problems:

The environment: Families living in rural areas in Bolivia usually do not have a proper access to gas and electricity. As a consequence, they are forced to use firewood to cook. UNICEF estimates that in developing countries, more than 80% of the wood is used to cook.  On average, this translates into a yearly consumption of 100kg of wood per month per family. This intensive use of wood, in addition to emitting destructive gazes such as CO2, participates considerably to the deforestation in these countries (10% of the deforestation could be avoided thanks to the use of solar cooking).

Women emancipation: Cooking can strongly complicate the life of women, if they do not have the appropriate technology. Women in rural regions are often forced to walk several hours per day to bring wood back home. This harassing task prevents them from working and to participate to the economic and social life.

Context:

In Bolivia, 40% of the population lives in isolated rural zones and is not properly served in energy. Moreover, as their access to technology is limited, the people situated at the « Base of the Pyramid » generally use rudimentary cooking methods. The Bolivian Altiplano, where Sobre La Roca’s activities are concentrated, is an ideal location for the use of solar energy: it is at more than 3000 meters of altitude and enjoys 300 sunny days per year.

The company;

Headquartered in Cochabamba, Bolivia, Sobre La Roca was founded in 1997 to produce and distribute solar cookers to the Bolivian farmers living in rural areas. The solar cooker is a thermal box constituted of different mirrors that reflect solar rays within the box. The good insulation of the box enhances heat conservation enabling temperatures of 150°C and therefore making it possible to cook all kind of dishes. Solar cookers are easy to build which allow Sobre La Roca to sell them at the attractive price of €50.

Sobre La Roca has also developed complementary activities. It has launched awareness campaigns on the ecology. It also offers trainings to teach Bolivian families how to use the solar cooking and to improve their food habits. The company is in a growth phase: if up to now, Sobre La Roca has already sold 5000 solar cookers and educated more than 2400 women, it should reach the number of 10,000 solar cookers sold by the end of 2009.

The entrepreneur:

Ruth Saveerda de Whitfield is a Bolivian social entrepreneur living in Cochabamba. Convinced of the potential of solar cookers, she dedicated her life to Sobre La Roca that she founded 12 years ago. The first years of Sobre La Roca have been very difficult. During this period, Ruth did not hesitate to visit to the most isolated regions of Bolivia and to meet local communities to promote her product. In 2004, as the company was close to go bankrupt, Ruth and her husband conceded huge sacrifices which allowed Sobre La Roca to survive. Believing that “real” value relies in Sobre la Roca’s mission, they went until selling their wedding valuables.

Social Impact:

The use of the solar cookers contributes to the environmental, social, sanitary and economic development. Firstly, solar cookers favour nature preservation as 500 cookers enable the preservation of 5000 acres of forest per year without any CO2 emissions. Secondly, solar cookers, given the time savings they allow, enhance the women social and economic emancipation. They can indeed allocate time to other activities instead of spending hours to collect wood and watch out the cooking of their dishes. Lastly, cooking with solar energy increases the nutritive value of the meals as it leaves more vitamins within the ingredients giving them a higher nutritive power.

Beyond its product, Sobre La Roca has a positive social impact throughout its value chain. The basic elements of the social cookers are built in a prison of Cochabamba as part of a reinsertion program for prisoners

Financial impact:

E+Co’s support: During the first years, Ruth Saveedra financed Sobre La Roca with her own money. Her launching strategy consisted in offering 10 solar cookers to different farmers in order to measure their social impact and to promote the product. Then, the company grew through auto financing; the profits generated by the sales of its cookers were reinvested and allowed it to grow but at a limited pace.

After 7 years, Sobre La Roca had sold 2,500 cookers. However, the financial situation of the company became not sustainable as it had to renew its infrastructures with no capital to do so. The social investment fund « E+Co », believing in Sobre La Roca’s future and potential, backed the company with a $20,000 loan refundable in 3 years. This loan enabled Sobre La Roca to increase its production capacity and to reach a larger proportion of customers. The total impact of the loan is striking as it triggered a 300% growth of the production and gave the possibility to Sobre La Roca to convert into a small enterprise owning its own infrastructure.

E+Co’s support has been decisive in Sobre La Roca’s economic development and in the extension of its social mission.

The use of microfinance: The price of the solar cooker is 50€. While being affordable, this price remains too high for some people at the « Base of the Pyramid ». To cope with this situation, Sobre La Roca, collaborated with E+Co and created a fund that proposes micro credit loans. Moreover, Sobre La Roca is currently building a strategic alliance with FIE, a leading microfinance institution in Bolivia, whose broad network of agencies will ease the access to capital for many people and consequently ease the acquisition of solar cookers.

Sources:

Interview with Jorge Gronda, founder CEGIN and SER System

www.solarcooking.org

www.adesolaire.org

www.eandco.net

CEGIN: The video report!

June 2, 2009 | Comments Off | Enterprises, Videos

Through the use of his CEGIN clinics and his SER system, Doctor Gronda aims at providing quality healthcare to the people at the base of the pyramid. By treating over 40 000 patients, CEGIN contributes to the development of the most marginalized communities of the Jujuy Province in Argentina. As labor force is the main working tool of the farmers in rural regions, access to healthcare constitutes the basis of economic and social development.

For more information, read CEGIN’s profile


Fair Street - CEGIN from Angalio Productions on Vimeo.

CEGIN: Healthcare for all

June 2, 2009 | Comments Off | Enterprises

After problems faced by cartoneros, education and water access, Fair Street’s third report puts forward a doctor who seeks to provide the poorest of people with access to healthcare.

Problem: healthcare

In our previous report, we focused on the essential role played by education in economic and social development. Health must be considered as a second fundamental factor in constructing a sustainable future. One cannot imagine a country adopting a development policy which does not seek to improve access to healthcare services. For rural populations, whose workforce is often the main production factor relied upon for agriculture, good health is an essential basis for any progress to be achieved. In far-off regions, particularly, women and children suffer from difficult living conditions; one of the UN Millennium Development Goals is to reduce by three quarters the maternal mortality ratio by 2015. The Juyjuy Province is especially affected by this problem, with a maternal mortality ratio ten times higher than in France.

Context:                                                                                                 

In Argentina, over half of the population does not have access to social security. But even those whose work status allows them to enjoy social security benefits often choose in addition to subscribe to a private health insurance. This is because of the inefficiency of the public healthcare system, and for this two main causes are identified. First, it is decentralized and managed at the level of provinces, which leads to strong differences between regions in Argentina. Moreover, as the State is unable to offer a complete set of solutions, workers unions tend to create their own obra social (social security), which also causes irregularities and many organizational problems. The Argentinean population thus has two options: either to resort to private healthcare systems, usually too expensive for the populations at the base of the pyramid; or to use available public services and consequently accept its inefficiencies and waiting lines that can last up to several days. But this time spent waiting prevents the patient from working, and providing for the needs of his family.

The company:

CEGIN (Centro Ginecologico Integral) is a medical center founded in 1989 which specializes in the provision of medical services to poor women from rural areas. The CEGIN center manages to offer quality services at half of the market price! In order to achieve such results, their strategy is based on the use of the economies of scale. The medical industry is faced with very high fixed costs (equipment, infrastructure…), whereas the additional cost of a new client is actually relatively low. The CEGIN center therefore targets a very large number of patients in order to spread its fixed costs. By working many hours and treating a large volume of patients (40 000 total), the center can thus guarantee a quality service whilst achieving lower rates of consultations. Rather than offering free services, the CEGIN approach is to charge the patient a low — but fair — cost. They have come to realize that the patient feels more dignified that way, and in consequence is treated with greater respect by doctors.

Five years ago, Jorge Gronda launched the SER system within the CEGIN center. It is a membership card that patients can purchase for 10 pesos (€2) per year which gives them access to the 60 CEGIN medical practices. By presenting this SER card, patients enjoy preferential rates in CEGIN centers that charge less than half of the market price for medical services (for example, an ultrasound scanner costs 20 pesos in CEGIN centers, instead of 50 pesos normally). The main idea behind the SER card, beyond increasing access to healthcare, is to create a network that will later allow its members to enjoy various advantages. By creating this network, and taking advantage of its high amount of members, the SER system can have a considerable influence on shopkeepers in the Jujuy Province. Currently, card holders already enjoy discounts in some pharmacies, and in the long term, Jorge Gronda’s ambition is to develop a system of “social franchise”, and extend the SER card’s field of action to various fields such as food, construction and transports. His aim is that necessary fundamentals for a decent life be accessible at low cost for all the people living at the base of the social pyramid.

The entrepreneur:

Jorge Gronda is a doctor originally from the Jujuy Province. First active in the public sector, he left it over 25 years ago to found CEGIN. Tired of the public healthcare system’s many gaps, he launched the CEGIN initiative with two motivations: first, he wished to offer quality healthcare to those at the base of the economic and social pyramid; and second, he wished to reduce the distance between doctors and patients. Jorge Gronda’s has earned much recognition and gratitude for his work. He was first elected Entrepreneur of the Year by the Schwab Foundation in 2005, he then received the United Nations Development Prize, and he was finally invited to share his vision of the future at the Davos World Economic Forum in 2008.

Social impact:

The social impact of CEGIN and the SER system is obvious, and can be summarized as follows: to allow the people at the base of the pyramid (by definition, those who do not have access to social security) to have access to quality healthcare. Nowadays, over 40 000 people are followed by the CEGIN clinics (including 20 000 through the SER network). Over 10 000 biopsies are carried out each year in CEGIN clinics, which is estimated to have prevented the development of more than 300 cancers.

Nonetheless, Gronda does not limit himself to the provision of healthcare services. Instead, he takes an interest in acting out of consideration for the poorest of people. During his interview, Gronda insisted several times on the important role of the SER card. First, people pay in order to subscribe for this card, therefore valuing it more than if they received it for free. This requirement has a direct impact on the level of the care they receive, as they are more inclined to share information on their health that facilitates the work of their doctors. Second, belonging to the SER networks and enjoying quality healthcare services considerably increases the self-esteem of people suffering from social exclusion. Thanks to the satisfaction of SER clients, Gronda has never had to publicize his system. The pride they take in being part of this network encourages people to talk about it in a positive way, and this word of mouth has proved to be an essential contribution to the development of CEGIN.

Financial impact:

 Support from a fund: Gronda is currently attempting to finalize negotiations with a European fund. Because of a confidentiality clause, we are unfortunately unable to divulge its name. The financial contribution from this fund should allow the consolidation and extension of the SER network. The objective is to extend the number of members from 20 000 to 50 000 over the next five years. According to Gronda, such financial support from an external organization is necessary in order to achieve this objective.

Use of microfinance: 80% of health problems can be resolved with an SER card and the consultations at half price that it allows. However, some serious problems require much more expensive surgery. In these cases, CEGIN uses the benefits of micro-credit in order for its clients to afford these operations. The most common operations they have to carry out cost on average 3 000 pesos (€ 600 +/-). A micro-credit fund financed and managed by CEGIN allocates credits equivalent to the costs of the required operations. These credits are usually reimbursed in ten regular payments. Gronda is a pioneer in the use of micro-credit for health purposes; considering that health is a basis for development, he believes that it is essential for people to have access to capital in order to extend their access to healthcare. For the worst cases that micro-credit cannot finance, CEGIN is trying to set up a micro-insurance system. Statistically, these cases only represent one in a 100 000 patients, so Gronda is trying to take advantage of the “strength in numbers” effect of the SER network; the small contributions of all members of the network would finance the treatment of exceptional cases.

The SER system rests on a fundamental financial principle: diversification. Members of the network are at the base of its success and development. That is why, by extending the network, Gronda is consolidating it. With more members, the various risks are diversified and the global risk is reduced. This diversification that reduces the system’s profile of risk also plays an essential role in financing both the workings of micro-credit and the development of a micro-insurance system.

 

Sources:

 Interview with Jorge Gronda, founder CEGIN and SER System

Llobeta Robert, Recuperando la salud, Grupo Editorial Lumen, Buenos Aires, 2007

www.oms.org

www.undp.org

www.schwabfound.org

 

ETV: The video report!

May 21, 2009 | Comments Off | Enterprises, Videos

ETV: Water at the source of social change; the video of our second report…

Fair Street - ETV from Angalio Productions on Vimeo.

The second report takes place at Bariloche, in Northern Patagonia. After a meeting in Buenos Aires with the manager of Ashoka, a network that supports social entrepreneurs, we decide to change our itinerary and make a “small” 2000 km detour to Bariloche.

Problems:

Water: Water is a crucial concern, at the very heart of the environmental challenge confronting humanity. Management, supply and diminishing resources are all issues on which much progress still needs to be made. Water quality has a huge impact on the living conditions of the poorest populations. Better water quality improves both the food supply and the hygiene of those “at the Base of the Pyramid”. With improved hygiene they are better prepared to confront the challenges of their everyday life and they can shift their efforts from fighting for survival to their personal development.

Education : In developing countries, there are currently 75 million children who do not attend school, and 861 million illiterate adults. Access to education is universally recognized as a key factor for economic and social development. Education develops knowledge, and gives access to employment: by learning concepts and techniques, marginalized communities can benefit from growth and improve their situation. They are then able to take personal responsibility for themselves and for their families. In developing each individual’s potential,  Education makes a real difference to the dignity of the human condition. “To ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling” is one of the objectives of the United Nations’ program to eliminate poverty by 2015.

Context

Despite its status as an emerging country, Argentina is a country where poverty is still prevalent, be it in big cities like Buenos Aires or in far-off regions such as Bariloche. The economic crisis that hit the country at the start of the decade had a profoundly detrimental effect on the country’s economic and social situation (between 1998 and 2001, the GDP fell from 300 to 220 billion pesos!), and its consequences remain highly tangible today. In Argentina, over half the population lives below the poverty line, and one in five is in a state of complete destitution, with revenues insufficient to provide even the necessary minimum to maintain physical capacity. This situation is mainly the consequence of a high unemployment rate: in the region of Bariloche, a quarter of the active population is unemployed, and this figure reaches 75% in the most remote areas.

The direct consequence of this poverty is the marginalization and social exclusion of a substantial proportion of the population. People live in precarious conditions which are often difficult to escape.

The company:

ETV (Emprendimientos de Tecnologias para la Vida) was founded in 2006 and aims at developing, building and distributing technological solutions to improve the living conditions of the people at the base of the social pyramid. Currently, the main product developed by ETV is the Bomba de Soga, which pumps water. ETV’s objectives are threefold: to harness the potential of technological innovations for the poorest communities; to provide work to young people from the Fondation Gente Nueva; and finally, to use some of the revenues generated by the sales of their products to fund the foundation. However, at this stage, the profits generated do not yet allow significant progress towards the achievement this third objective.

Created 25 years ago, the Fondation Gente Nueva aims to promote education and access to employment to those excluded from the traditional educational system. Helped by a network of primary and secondary schools, and the development of workshops and regional education programs, Gente Nueva wants to give each individual a chance to realize his or her potential. The schools of the Gente Nueva network are free, and the salaries of teachers, who are selected by members of the foundation, are paid by the State.

ETV products are made in the workshops of Gente Nueva, which employs a workforce of young apprentices.

The entrepreneur:

Gustavo Gennuso is originally from Buenos Aires, but he has been living in Barichole for the last 30 years. He moved there when he started studying nuclear energy at the Balseiro Institute. He continued to work in this field until 2000, whilst developing his social innovations. After creating the Fondation Gente Nueva, Gustavo now wants to prove with ETV that a viable and lasting social impact is possible. Gustavo Gennuso’s ambition is to achieve profound social change. He wants to give the poorest members of society every opportunity to develop. By accomplishing social change, he wishes to transform not only the lives of the poor, but also society as a whole.

Social impact:

ETV aims at making significant improvements to the living conditions of the poorest people. Technology development is but a means to this end. The company’s social impact is threefold: first, it improves the living conditions of those at the Base of the Pyramid; second, it creates opportunities for those suffering from exclusion; and thirdly, it finances the Fondation Gente Nueva. In three years of existence, ETV has already succeeded in reaching out to 300 families. The long-term objective is to have a direct impact on the lives of 150 000 people.

Since its creation, the Fondation Gente Nueva has welcomed over 5000 young people into its classes. It has also trained  another 3000 young people through its regional education programs. Gustavo Gennuso’s initiatives have also had an influence on political decisions relating to education in the regions where he is active.

Financial impact:

In this case, the financial impact lies more in the role played by microfinance in extending the company’s social impact than in direct financing.

Microfinance : Micro-credit is an innovation that has allowed millions of people to extract themselves from poverty. If access to capital can allow poor people to create a micro-enterprise, why should it not also allow them to buy products that will significantly improve their living conditions? Such is ETV’s strategy. It is true that the targets of Gustavo’s social business can often not afford to buy his products. The “Bomba de Soga” costs 700 pesos (+/- €140). People who earn an average of €2 per day can hardly hope to find such an amount. So, in order to extend its social impact, ETV uses the micro-credit formula to make its products more accessible. Thus, ETV’s clients fund the purchase of a water pump with a micro-credit. This support from microfinance has a twofold impact: it extends ETV’s social impact, but it also increases the future benefits of the company — and, therefore, the financial resources available to Gente Nueva, who can in turn accelerate social change through increased access to education. As micro-credit is not one of ETV’s activities, they collaborate with different MFIs (Microfinance institutions) and NGOs from the regions where they are active (mainly Northern Patagonia and the Jujuy province). This collaboration with the microfinance sector is the only way to reach the targeted 150 000 people.

Financing: In parallel with its social vocation, ETV also aims to provide financial resources for the Fondation Gente Nueva. This type of model is fairly widespread among social enterprise initiatives: in order to avoid being dependent on donations, “business” solutions are preferred and “social businesses” are created with the aim of financing the non-profit side of their activity. The remainder of the profits are reinvested in the company in order to finance research for other new technologies.

ETV and Gente Nueva have received a financial contribution from the organization Ashoka — which we will present later — of which Gustavo is a member. The company also benefited from various funds, essentially from philanthropic investors, in particular a Swiss “business angel” who has provided a credit on very favorable terms (but about which we have not received any other details). Today, ETV is seeking financial backing amounting to $74 000 (€54 833) in order to finance investments necessary for them to achieve the objectives of their business plan — specifically, for the launch of new technologies.

The strength of Gustavo’s model resides in its capacity to tackle different problems simultaneously. The all-embracing nature of his organization is striking! His model features three essential elements in the fight against poverty: education, access to capital, and healthcare. By creating synergies between different organizations, he can considerably extend his social impact, and this allows him to implement lasting change.

Sources : Interview with Gustavo Gennuso, founder of ETV and of Fondation Gente Nueva

www.unesco.org

www.oms.org

www.schwabfound.org

www.changemakers.net

 

Etilplast: A cartonero’s adventure

May 5, 2009 | Comments Off | Enterprises

Our first visit to a company takes place in Buenos Aires and starts off with an epic beginning…

We have an appointment on Wednesday morning at 10:00 am near the Tigre suburb, outside Buenos Aires. To get there, we take a rémis (like a taxi, but cheaper) but the driver obviously has no idea of the road he needs to take.

As we are already 45 minutes late, our driver keeps stopping at every street corner to ask the way. After yet another stop, his engine caughs and dies… and will not start up again. We get out and push the car for 50 meters until the engine starts. According to the directions we received, we must now be close to our destination, so we chose to continue on foot…

We finally arrive at the Etilplast Cooperative where we are greeted by Walter, the cooperative’s co-founder. The discussion begins at the entrance of the cooperative, and continues in his small office after he has taken us on a guided tour of the place. Although seemingly shy, Walter is indefatigable when it comes to talking about his cooperative, its objectives, the problems it tackles and his plans for the future.

Problem:

Argentina, like many other emerging markets, does not enjoy a waste sorting system at the national level. Waste and rubbish are not sorted because the population is not conscious of the consequences that poor waste management can have on the environment. Recycling is an activity that has only recently started to take hold. And it’s true that as long as the Argentinean Peso benefited from the trust of investors, the import of raw materials was cheaper than the purchase of recycled products.

Context:

Between 1998 and 2002, Argentina experienced a serious economic crisis which intensified in 2001 when the Ministry of Economy announced that the country was no longer able to reimburse its debt. This crisis deeply damaged the country’s economic, political and social situation and led to a strong increase in poverty, the consequences of which are still visible today.

The entrepreneur: 

In 2001, at the height of the crisis, Walter Lizarazu finishes secondary school. The bankruptcy of his father’s store means he can not pay to continue his studies. He starts looking for work, but the intensity with which the crisis hit the country rapidly makes his job search futile. He then has little choice but to become a cartonero. Walter is quickly confronted with the difficulty of his task: rubbish is scattered from one street to the next, nothing is sorted, few elements can be recuperated, and the money he makes is no match the amount of energy he expends. He is particularly struck by the fact that all he is doing is sorting what others have mixed together beforehand… One day, a shampoo company needs to get rid of 6 tons of plastic: Walter takes care of it, and sees the opportunity to launch a project with a wider scope than anything he had imagined. In 2003, the cooperative Etilplast is born!

The company:

Etilplast is a cooperative that currently employs 38 people. Under Walter’s drive, and that of his father, its members started by focusing on recycling plastic. They gradually extended their activity, and now treat various types of waste. Anything that cannot be recycled is sent directly to the rubbish dump, the rest is taken to the warehouse. There, the waste is sorted; after separation, cardboard and glass are sold as raw materials to other companies. Plastic, on the other hand, is redirected towards the recycling factory where, after treatment, it comes out as a raw material virtually indistinguishable from the original product.

Social impact:

The cooperative has two fundamental objectives. The first is to raise the population’s awareness of the environmental issue of waste management. Etilplast is not content with simply sorting and recycling, it aims at solving the problem at its source. They collaborate with several schools where they educate young students on the issue. Walter is convinced that if young people understand the stakes involved in sorting and recycling, they will have the capacity to influence their parents’ habits. The second objective is to offer destitute people a status-enhancing job. Walter is proud of the fact that Etilplast has improved the living conditions of 38 families. However, his humility is striking and he does not like saying that he is the founder of Etilplast, as he considers that all the people working with him have contributed to its development.

Financial support:

The cooperative is largely self-financed. Most profits are reinvested into the company to improve its working practices and to increase its social impact. In 2008, Etilplast received a 600 000 pesos loan (around €145 000) from the Dutch fund Oikocredit (see profile in the category “Financial Players”). This credit has specificities that make it beneficial to the development of Etilplast; for example, Etilplast enjoys a two-year capital exemption,  which means that during the two first years they need only pay back interest, and they will begin reimbursements only in the third year. This exemption allows Etilplast to enjoy the full benefits of the credit before having to reimburse it. Walter’s account was sufficient for us to measure the impact of Oikocredit’s contribution: “In five years of existence, we had managed to employ 20 workers and we collected the waste of approximately 2300 families. Following Oikocredit’s loan, in six months, we have increased our workforce to 38 employees, and we can now collect the waste of 1800 extra families.”

Walter concludes the interview by telling us that “Etilplast’s vision is that nothing is impossible”. He has begun as a cartonero, and is now planning to replicate his model and extend it, in the hope that this will push political authorities to take appropriate measures. Similar initiatives have emerged in other areas of Buenos Aires. The devaluation of the peso which followed from the Argentine crisis has injected some dynamism into domestic recycling initiatives, as recycled materials have become cheaper than raw material imports. As a new crisis is hitting the world economy, Walter can this time face the future with fresh optimism…

(1) In Argentina, “cartonero” refers to individuals who collect waste in the streets, essentially to recuperate cardboard. They then sell the collected materials and live off the proceeds, earning an average salary of €3 per day. The cartoneros are held in low regard by society because of the degrading nature of their work, and as a consequence, the majority of them suffer from social indifference. They are also exposed to extremely hazardous hygiene conditions, and suffer repression from both the police and organized crime groups. The number of cartonero families increased dramatically as a result of the crisis that hit the country at the turn of the 21st century: according to the World Bank figures, over 100 000 new families began to live off this activity in 2000.

 

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